“A month or two ago, a guy at work described his experience looking for an old starter house in Coquitlam. I think he was looking around the Coquitlam/Burnaby boundary. He said every house he tried to put an offer on was bought by developers with no conditions. He was not considered by the sellers because it was easier to sell to the developers, so he gave up looking.”
– Summer at vancouvercondo.info October 22nd, 2011 at 9:09 am
“In ‘Burquitlam’, whole blocks of old houses are being leveled for townhouses.”
– Patiently Waiting at vancouvercondo.info October 22nd, 2011 at 9:26am
Vancouver Real Estate Anecdote Archive 
Meanwhile, to the south:
“President Obama will announce changes in the government’s Home Affordable Refinance Program (HARP) on Monday, making it easier for homeowners to capitalize on current low-interest rates by refinancing their old, high-interest mortgages.”
http://money.cnn.com/2011/10/24/real_estate/housing_refinance/index.htm
…
The new rules will allow homeowners who owe more than 125% of the market value of their homes — $125,000 in mortgage balance on a home worth less than $100,000, for example — to get new loans.”
Gotta keep inflating that bubble at all costs! Let the taxpayers take on the risk!!
How many of these people will ever be out of debt? And I don’t imagine more than a tiny percentage of them are saving even pennies for retirement.
Well, I guess that’s what Wal*Mart greeter jobs are for…
(And, will we see this at some point in a neighborhood near us?)
These programs aren’t seeing much usage down here. The problem is that the loan is far underwater, not necessarily the payment. The value of many of these homes won’t get back up to the purchase price for a couple of decades. These owners are wondering how to get out of these loans altogether, not refinance them.
My impression of the program is merely to make accessible the same refinancing options lots of owners at 90% equity and below have already taken advantage of to get down to the 4-5% interest rate range. Remember, in the U.S. most people have a 30 fixed rate mortgage. Locking in 4% now is for life. Also, a lot of people got screwed by bait and switch mortgages that aren’t fixed or have crazy things like early payment penalties. Those people that are most in need of refinancing, can’t. If you are at 125% loan to value ratio and you plan to stay in the house, how is that economically different than someone at a 90% ltv who is in line at the bank refinancing at the same time?
Not that these programs actually work as intended. The last one was roundly abused and subject to fraud. But I don’t see the “inflating the bubble issue” on it at all. If anything, it’s deflationary to refinance and keep paying absurd amounts on an excessive mortgage than to simply take the foreclosure and start over. In the start over mode all those families would have more discretionary income, which is inflationary. This way they’ll have a lot less.
“90% equity” => “90% ltv”
“Gotta keep inflating that bubble at all costs! Let the taxpayers take on the risk!!”
Exactly. Inflation be damned says the Bank of Canada and its daddy, US Fed, keep that bubble afloat with endless near interest-free loans, the hair of the dog that bit us.
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Disclaimer for those who’d pick apart the wannabe PhD economist: Look elsewhere. I am a biostatistician, not a wannabe economist. My name on this board is to portray my story, a well-educated high earner living in a basement suite due to Vancouver real estate prices, nothing more. [And nothing less. -ed.]
“…biostatistician, not a wannabe economist.”
You’re practicing authentic (&WorthWhile) science, BSPhD – whereas OrthodoxEconomics amounts to little more than mystical shibboleths accompanied by pretty graphs. It is traditionally taught/practiced by people in ‘temples’… Not labs (as ever, thankyou for that line, PP). I’d certainly wager that ‘economics’ has ruined more lives than bad epidemiology/statistics ever has/or will. Of course, that’s just an unsubstantiated opinion (I know how ‘fussy’ you numbers people are!).
The only people ahead of the economists for running lives, creating unhappiness on a global scale would be the religious establishment!
Well thank you Nemesis (and VREAA for the ed.), and we try not to be too fussy when receiving a compliment ;).
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Disclaimer for those who’d pick apart the wannabe PhD economist: Look elsewhere. I am a biostatistician, not a wannabe economist. My name on this board is to portray my story, a well-educated high earner living in a basement suite due to Vancouver real estate prices, nothing more.
ams… ‘economics’ is a religious establishment (the “is” should be italicized, but I’m not clever enough to do that).
Beware of ‘isms’.
Nem, try this:
*is* or for added emphasis **is**
Or…
http://mike.brisgeek.com/2006/08/30/simple-html-for-formatting-blogger-comments/
How’d they do it with letterpress?
A great read about expectations http://blogs.reuters.com/great-debate/2011/10/05/bank-ceos-and-the-infinite-pile-of-cash/
Here is another policy idea that could work to alleviate the housing ownership affordability problem: Do not permit pre-sales. If not, do not permit assignment of contracts until occupancy. I’d like to see what discussion we can have on that?